I have recently written many articles and made videos about accounting and the common violations found in documents. By “common,” I mean that the violations described below occur in about one-third of companies opened by Russian-speaking people.

In response to my articles and videos, I often get the question: “How can I check my accountant, because I suspect they are keeping the records incorrectly?”

Let me briefly show what you can pay attention to. But first, let’s agree that all violations can be divided into two parts. The first part includes things that anyone, including you, can easily check. This is actually the most important part because these violations are obvious, easy to spot, and can lead to significant fines. The second part is harder to check, for example, whether the annual report was filed correctly. You won’t be able to check this yourself, and it’s also harder for inspectors, so the chance that anyone will look into it is much lower.

Violations from the First Part That You Can Easily Detect Yourself

1. Check if you have a work book (radna knjizica).
You should know whether it was issued to you or not. It is issued personally at the city administration. See how it looks in the photo below.

Helping to issue this book is the responsibility of your accountant. We have issued it for every client. I hope your accountant did the same.

Why is it needed?
First, it records your pension work history. Without it, you may reach retirement age and the pension fund could say you worked 15+ years without this work book, so your pension record won’t count and you will get nothing. Agree, that would be very unpleasant. Second, not having it can result in a fine. If an inspection comes and there is no work book, the fine is 2500 euros. If you leave work (retire or get permanent residence and decide to close your company), the fine is even higher — from 2,000 to 20,000 euros. This is stated in Article 208 of the Labor Law effective at the end of 2024.

Fine for missing work book

2. You must pay yourself a salary monthly.
You might say no one checks this? I agree, no one really checks. But honestly, almost nothing is checked in Montenegro, but that does not mean it will be like that forever. What if inspections start tomorrow? Why make violations out of nowhere when you can avoid them?

According to labor law, salary must be paid monthly from the company account to the employee’s account. Violating this rule can lead to a fine of up to 20,000 euros.

Whether you pay yourself or not, you know this even without asking your accountant.

3. Make sure you have a bank account and pay taxes through it.
Sometimes people don’t want to open a bank account. Sometimes they want to, but their accountant is lazy and advises paying taxes without opening an account. Remember, technically paying taxes at the post office is possible, but it is punished by a fine of 10,000 to 20,000 euros.

4. The accounting must have certain documents.
Some must be kept for 3 years, some 5 years, some 10 years, and some documents must be kept forever. Check that you have all the reports. If the company is not working, there are relatively few reports. You must have IOPPD — a monthly report, so it should exist for each month. You should also have a package of annual reports (balance sheet, income statement, and statistical annex). Also, there should be a printed general ledger. All these documents must be kept in paper form.

For every primary document (bank statement, invoice, payroll calculation, etc.), there must be accounting entries. These entries appear in the general ledger, whose pages must be printed and attached to the documents.

Often accountants say they keep records electronically and do not print anything, everything is on the computer. See below a screenshot from the accounting law. It says that such electronic-only accounting is punishable by fines from 500 to 16,500 euros. Most documents must be kept not only electronically but also on paper.

All the violations described above are easy to detect; you don’t need accounting knowledge for this. Spend 10 minutes of your time and check.

Violations You Won’t Be Able to Detect Yourself

You probably cannot check the correctness of entries or the proper filing of various reports, including the annual balance sheet. But, as I said above, even inspectors find such checks difficult, and such inspections are not very frequent.

You can contact the article’s author with questions about opening and closing companies, obtaining residence permits, and accounting services.